BuzzKill

It looks like Buzz Hargrove got nothing from his meeting this morning with Rick Wagoner and the GM brass. I'm not sure what the solution is in a situation like this, I mean fewer people are buying big trucks - and that's a good thing, unless of course, you build big trucks. What stinks here though is the fact that GM seems to have suddenly realized this just two weeks after concluding a contract negotiation with the CAW. It's hard to imagine that GM was bargaining in good faith - and if they honestly had no idea what was happening/going to happen to the truck market in the US given the credit crunch and the evaporation of the new home industry (contractors are one of those groups that legitimately need trucks), then they are business-illiterate.

I can see why GM would have to shut down the Oshawa truck plant (and I can only imagine how painful it will be for the workers affected), but as for their recently concluded labour agreement, they must have been lying or stupid.

The Rational Perfection of the Free Market

Nah, it's all testosterone. At least in securities trading they say. So does this mean we have to start testing traders for steroids? I can just imagine all these guys on Bay St. getting needles in their backsides so they can make some hot deals.

British Comedy Explaining the Markets

This is pretty much what has happened in the past couple months (via):



and

The New Gilded Age

Mound of Sound has some stats about how the rich are, you know, getting richer while everyone else gets left behind. A quote from the New York Times article:

"It is meaningless to middle- and low-income families to say we have a great economy because their economy looks so much different than folks at the top of the scale because this is an economy that is working, but not working for everyone."

We live in an interesting age, one where we've been able remove any moral or ethical dimension from the workings of our economy, it's just business. Economic orthodoxy forbids us from criticizing ridiculous CEO salaries or idiotic income disparities - it's just the marking working itself out. But heaven forfend if anyone has gay sex or something.

The Free Market is Magic!

Apparently that was the thinking going into Iraq on the part of those in the US that were tasked with planning its post-invasion economy:

"Brinkley said early economic planners had made the understandable mistake of assuming that a free market would rapidly emerge to replace what he described as Saddam's "kleptocracy", and create full employment."

One can only imagine that these same people think they can put a watch in a bag, smash it with a hammer, and pull a much better watch out of the bag. This is more of the Underpants Gnomes-type thinking that has characterized this invasion:
Step 1: Invade country, overthrow old order.
Step 2: ???
Step 3: Stable, united, prosperous, market-economy, pro-US, pro-Israel, cheap oil-selling Iraq.
For all of their pro-market posturing, I'm wondering if the Bushies have any understanding of how markets are supposed to work.

A Rising Tide Lifts All Boats?

That's the line that you hear often enough when dealing with economics, but is it true. In the case of the United States since 1973 Eric Nilsson begs to differ. He isn't done crunching the numbers but from what he has so far it looks like we are just getting back to the early 1970s in terms of real hourly earnings.

For a narrower study here's Eric's take on the 2003 Bush tax cut.

Richard Gwyn discovers the Super-Rich

...and when he does, he comes to the realization that they aren't much like you or me. What's problematic I suppose is where the rest the unwashed masses is comfortable at constraining the super rich. Gwyn seems to be pining for the days of the moderately wealthy CEO, but who determines how much is enough? If you are an orthodox neo-liberal economist I suspect that, in order to be consistent, you cannot say that too much is ever enough. So what's the alternative? A more managed capitalism? Socialism? Or do we just cast our lot with the market and let the chips fall where they may? Let's all pray to the invisible hand!

The Invisible Hand Job of the Market

Among the many, many bad news stories coming out of Iraq, Juan Cole reports (third item) that unemployed factory workers have started protesting the fact that they are, well, unemployed.

It seems that the occupation shut down these factories in the hope that capitalism would magical restart them in a matter of months (weeks). So far it has not happened. The magical market fairies have not descended on Iraq to fix things up.

I think you can make a case for market economies, but the neocon architects of Iraq do not appeal to the market as an economic mechanism, rather they entreat it as it were a god.

What's wrong with economics?

Atrios explains it quite well here. A sample:

"My problem with economists is that even many of the smart ones tend to instinctively equate the social welfare of a country with its per capita GDP. This is absurd, and it isn't as if they don't actually know this, but nonetheless it tends to be how people operate."

Of course there are a whole bunch of rich and powerful people in any country who are quite pleased to see that this is adopted as orthodoxy. So long as the overall economy grows, they can damn anyone who points out that the share of the wealthiest one percent may be growing faster than the total GDP (i.e.: everyone else's share is shrinking). That those in the media elite from the owners to the top-tier anchors to the commentators-at-large are almost all in the top bracket only serves to reinforce the big GDP = good mentality.